Independent craft brewing company East 9th Brewing has acquired Sample Brew for an undisclosed sum.
Sample went into administration in May with insolvency firm Rodgers Reid hired to find expressions of interest. At the time, Rodgers Reid said SAMPLE's annual turnover was around $2.6 million. (Food & Drink Business, 22/05/2019).
East 9th Brewing brand manager Benjamin Cairns told Food & Drink Business the company was “pretty excited” about bringing SAMPLE into its portfolio. “It’s one of those brands we really admired for a long time. It is also in big contrast to our brands even from a design perspective. It’s clean minimal design is different from our rough edges and raw Doss Blockos.
“And from a taste profile, its range is complementary to ours. They slotted perfectly into what we’re all about – a sessionable product with broad appeal,” Cairns says.
Sample’s business model was also similar to East 9th’s in its production facilities are outsourced to a third party.
Cairns says Sample has a great distribution footprint and East 9th plans to build on that. “We’re not amalgamating the sales run at this stage. There will be some back of house efficiencies but front of house will stay. We’ve re-employed three key staff from Sample."
In 2017, Sample announced plans to become Australia’s first beer company to raise funds with ‘crowd equity’. These plans were pulled due to reported outside investor interest, which ultimately fell through and led to the eventual voluntary administration of the company.
East 9th MD, Josh Lefers says: “It’s not an easy thing to create a sustainable beer business in Australia. Just because the category is experiencing great growth, doesn’t mean it directly correlates to an easy ride and great profitability for the companies that operate within that space.”
Independent Brewers Association chair Jamie Cook told Food & Drink Business the industry is growing so you would expect to see “a natural bell curve of business success in the sector now”.
Investors should not expect a return for at least five years. “It’s not easy money. When you factor in that sectoral growth rate, if you are going to succeed you need to be growing quickly as well, so that requires more capital and more investment. The return on that takes time.”
Sample Brew was founded in 2014 and is known for its core range of premium brews including Sample Pale Ale, Sample Gold Ale, Sample Lager, and the acclaimed Sample ¾ IPA. The brand is stocked across Australia in bottle, can and keg.
East 9th Brewing was founded in 2010 and is home to one of Australia’s biggest selling alcoholic ginger beers, Lick Pier, and the iconic Doss Blockos Pale Lager.
The acquisition is the first of a number of planned moves by East 9th. Hero partner venues and "an appetite" for further acquisitions are on the cards. It is also considering extending its beer range as well as exploring near-beer products and craft wine.